Overview

The price of Optimism has sank in recent days due to several bad news for crypto and the continuation of a bad trend in the entire cryptomarket. However, it seems that there is some reason why OP price increased faster over the recent days.

The main impact news has been that Alameda Research and FTX were in trouble and FTX was decleared as baknruptcy. As well there were some hacker stoling FTX funds previous to the declaration that stole several ETH tokens. Some of them were sold and affect not only the Ethereum price but also the EVM price and the whole cryptomarket.

For this reason, we are gonna explore now how has been the price evolution of OP and we will compare it against other cryptocurrencies. As well, we will try to find some pattern that could be related to the movement of the price.

Methodology

To do that, I have compared several metrics between OP and the main cryptocurrencies such as BTC and ETH and its competitors like MATIC and BNB. The metrics studied have been:

• Prices trends over the past month
• Daily changes over the past month
• Relationship between OP changes and cryptomarket changes
• Some causes for OP’s struggle.
• Study of any potential causes or any indicators that could help us predict whether/when it could recover?

Optimism price vs others

As seen, since the past 3 months, a total of 39 times the average market down more than 1%. Take into account that we have considered cryptomarket as average metrics of BTC, ETH, BNB, and MATIC tokens because in my opinion they are representative tokens. During these bad days when market down, the average changed in prices were -3.9%. However, in the case of OP price, the average percentage change during those days were -3.59. In fact, if we take into account how many times OP price decreased when cryptomarket falls more than 1% were 33. Then, in only 5 times when the cryptomarket goes down more than 1%, OP price stayed safe.

Finally, I have computed how many times OP prices outperformed the cryptomarket when it went down. From the 39 times, 19 days OP price outperformed cryptomarket, being 48.7% of times when OP price had a better performance than the whole cryptomarket.

To conclude this first approach, I have compared the evolution of OP price against the whole cryptomarket in order to see if it follows similar trends or at some points the OP price developed different sideways. In the first image, we can see the OP price changes over the past month in comparison to the other top crypto tokens such as BTC, ETH, BNB and MATIC. As it can be seen, when the BTC goes up or down, the other altcoins do the same but in a more pronounced manner. It seems that OP is one of the most volatile tokens, but the trend is the same as the rest.

In fact, if we take a look at the second image, we can see how there is a strong positive correlation between the OP price and the average cryptomarket price in terms of daily changes. It can be clearly seen that when the percentage is negative, the average market change is negative as well. On the other hand, when the OP price change is positive the avreage whole cryptomarket goes up as well. In both cases, when the percentage is higher, the same occurs for the whole cryptomarket.

Indicator 1: swapping activity

The first possible indicator selected is the swaps. When the price of an asset change, it is the major of the times related to its netflow on swaps. For this reason, I have selected this first indicator.

If we take a look at the first chart, it can be seen how the netflow of swaps for OP has been in constant changes over the past days and weeks, reaching the highest numbers between 7 and 9th of November, when the FTX and Alameda Research news were announced. If we take this trend and compare it against the OP price, we can see how they are clearly correlated due to follows the same trend.

Indicator 2: transfer’s activity

The second possible indicator selected is the transfers. When the price of an asset change, it is commonly realted to transfers activity. For this reason, I have selected this first indicator. Because of Optimism is an Ethereum EVM, the main transfers are in ETH so, I have analyzed the ETH token transfers.

If we take a look at the first chart, it can be seen how the volume of ETH in transfers has fluctuates a lot over the past days and weeks, reaching the highest numbers in December. If we take this trend and compare it against the OP price, we can see how they are not correlated due to follows contrary trends.

Key insights

• It can be seen how the OP, ETH and BTC prices followed similar trends. However, it seems that when the BTC and ETH prices drop heavily, the drop of the OP price tend to be higher.
• A total of 39 times the average market down more than 1%. Take into account that we have considered cryptomarket as average metrics of BTC, ETH, BNB, and MATIC tokens because in my opinion they are representative tokens.
• During these bad days when market down, the average changed in prices were -3.92%. However, in the case of OP price, the average percentage change during those days were -3.59. In fact, if we take into account how many times OP price decreased when cryptomarket falls more than 1% were 33. Then, in only 5 times when the cryptomarket goes down more than 1%, OP price stayed safe.
• From the 39 times, 19 days OP price outperformed cryptomarket, being 48.7% of times when OP price had a better performance than the whole cryptomarket.
• There is a strong positive correlation between the OP price and the average cryptomarket price in terms of daily changes. It can be clearly seen that when the percentage is negative, the aerage market change is negative as well.
• The netflow of swaps for OP has been in constant changes over the past days and weeks, reaching the highest numbers between 7 and 9th of November. If we take this trend and compare it against the OP price, we can see how they are clearly correlated due to follows the same trend.
• The volume of ETH in transfers has been increasing a lot over the past days and weeks, reaching the highest numbers in December. If we take this trend and compare it against the OP price, we can see how they are not correlated due to follows contrary trends.
• The active users have been increasing over time on Optimism passing from around 20k to 50k. If we compare this movement to the price of OP, we can see how there is a moderate positive correlation.

As a result, here we can see the difference between BTC and ETH price performances and OP price performance over the past 3 months. It can be seen how the ETH and BTC prices followed similar trends but OP has been in a different direction over the past weeks. However, it seems that when the BTC and ETH prices drops heavily, the OP price follows the same trend.

The second chart represents the daily change in price of OP against BTC and ETH prices. When BTC decreases the ETH prices decreased in a higher % and OP do the same as well, and on the other way around.

Indicator 3: active users activity

The final possible indicator selected is the active users transacting on the chain. So, when the activity on a network increases it tends to affect positively on the price and on the other way around.

In this case, we can see how the active users have been increasing over time on Optimism passing from around 20k to 50k. If we compare this movement to the price of OP, we can see how there is a moderate positive correlation indicating that when the active users increase the OP price do the same as well. Otherwise, when the active users decreased, the OP price goes down too.